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Nobody was surprised to hear about the record breaking performance of BHP Billiton, an Anglo Australian mining giant. Given the positive sentiment in metals manufacturing sector, everybody expected such a grand show. As we all know, BHP is in the business of mining of ferrous as well as non-ferrous minerals.

The major contributor to this rocketing performance is the ever rising appetite of Asia for iron ore, mainly from China. The iron and steel industry in Asia is growing quite fast especially in China, India and gulf region with many greenfield and brownfield expansions going on. As per the industry experts, this growth should continue at least for the next 4 to 5 years and this should give a lot of comfort to not only steel producers but also to raw material suppliers, equipment manufacturers and other allied industry segments.

Indian mining industry is also growing but still I feel that there is a lot to learn from an international company like BHP. Technology employed, marketing policy, capital investment and growth strategies and much more. Recently, a mining professional made a comment, " Indian mining companies do not mine. They just dig and sell". This is quite a nasty comment and I do agree that it may not be all that true. But the fact remains that many mining companies need to modernise themselves in terms of technology and mindsets. I would also like to add here that this is true for many mini steel complexes and most of the mini sponge iron units. I am quite sure or rather afraid that if these units do not change and modernise as per the time they are sure to perish !! We all talk about vigorous capacity expansion plan of China but how many of us know that many technologically backward mills in China are being closed ?

D.A.Chandekar
Editor & CEO

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Expansion drive curbs steel firms` profit growth

Modernisation and expansion at most steel companies appear to have taken a toll on short-term profitability. A glance at the first quarter performance of the Big Five Steel Authority of India (SAIL), Tata Steel, JSW Steel, Essar Steel and Ispat Industriesshow that the combined net profit has increased 2.66 per cent on a gross sales increase of around 30 per cent. SAIL and Tata Steel were the only two companies among the five to register an increase in net profit. SAIL managed to record its highest-ever first quarter net profit at Rs 1,386 crore compared with Rs 1123.84 crore, an increase of 23 per cent. Gross sales increased by 34.38 per cent to Rs 8,695.28 crore. Tata Steel registered a 3 per cent increase in net profit on gross sales increase of 10.82 per cent. JSW Steel registered a dip in net profit by 15 per cent to Rs 170.3 crore, with gross sales also recording a 0.9 per cent decrease. Essar Steel's net profit decreased from Rs 207.71 crore to Rs 41.13 crore despite gross sales growth from Rs 1812.95 crore to Rs 1,902.85 crore. Ispat Industries recorded an increase in net loss from Rs 79.49 crore (after adjusting for Ispat Metallics) to Rs 111.49 crore, while gross sales increased by more than 44 per cent. SAIL sources said the public sector managed to record an improvement in performance as techno economic parameters were much better. Moreover, interest cost, which was up for most companies on account of modernisation and expansion, was down for SAIL owing to loan repayments. The company not only reaped the benefits of three price hikes in the first quarter in flat products but also saw a price escalation in rails and wheels and axles, despite a relatively stable long products market. Tata Steel managed an allround improvement in labour productivity and operational efficiency. Raw material consumption came down and the company's share in value-added product segment such as auto went up, while sales of branded products also showed an increased. The other three of the major producers were largely hit by modernisation and expansion programmes. JSW Steel's hot strip mill was shut down for 37 days on account of mordernisation during the last quarter, resulting in 54 per cent drop in hot rolled coil production. Essar Steel was hit by high interest cost as the company increased capacity to 4.6 million tonne. Ispat Industries saw a higher interest and depreciation as the company capitalised the 1,260 tpd oxygen plant commissioned in January.

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Tata Steel eyes stake in Southern Ispat

Tata Steel Ltd. is considering buying a strategic stake in Southern Ispat Ltd., a specialty steelmaker based in the southern state of Kerala, reports said. Citing unnamed people close to the deal, the paper said that the talks are currently at a very early stage and it isn't clear whether Tata Steel is looking to buy a significant or a minority stake. Executives of both companies declined to comment, according to the report. The paper said the possible acquisition, estimated at INR1 billion, is aimed at expanding Tata Steel's presence in south India.

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Reflectometer developed by R&C Lab

The Research and Control Laboratory has developed a 'Reflectometer', a device used for measuring the brightness of a steel strip. In electrolytic tinning and shearing line, the brightness of electrolytic tin plate is assessed by visual inspection which is very subjective and may vary from person to person. Many times steel plates are diverted as second grade because of supposed surface dullness. To counter this the laboratory has developed a 'reflectometer' that measures the reflectance value of metal sheets.

Mr. S. S. Sahoo, Junior Quality Controller, R&C Lab took the initiative and started working at developing the instrument in house. The instrument saw the light of the day due to persistent effort by Mr. Sangram Das and Late J. Kujur of CRM Laboratory along with Mr. P. Raj, Senior Technician of Electronics Engineering Department who standardized the instrument. Notable contribution towards the development and standardization of the instrument was made by Mr. R. N. Swain, Senior Manager, R&C Laboratory. The instrument is a very simple low cost instrument, costing only Rs. 5000. It is capable of measuring surface brightness of metallic or non metallic sheets by method of comparison with the reflectance value of a plane mirror whose brightness has been taken as 100.

It can hence be used for ascertaining the grade correctly, which at a conservative estimate, will save 2% standard grade tin plate being discarded as second grade tin plate. This 2% additional standard steel would amount to Rs. 2.96 Lakh being saved for the plant. Besides, it would also standardize the quality the thereby help enhance customer satisfaction.

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PMO backs SAIL-RINL merger 

The proposed merger of public sector steelmakers Steel Authority of India Ltd (SAIL) and Rashtriya Ispat Nigam Ltd (RINL), which was put in the freezer owing to opposition from the Andhra Pradesh government, is expected to gather steam again, with the Prime Minister's Office (PMO) asking for a political consensus on the issue. Government sources revealed that given the sound business sense of a merger between the largest steelmaker in the country, SAIL and the Vishakhapatnam-based RINL, the PMO had asked the steel ministry to take the up the issue and work out a broad political consensus for the move. “There is no business logic for the merger not to go ahead except for sentiments of politicians from Andhra Pradesh, which stalled the process the last time. The PMO has asked the ministry to work on the issue from scratch and seek a broad consensus across political lines,” a government source said. The Centre had originally planned a merger scheme involving a host of smaller public sector units involved in the metals industry with SAIL to make it a behemoth, but faced strong opposition from the political parties from Andhra Pradesh and the company itself, which was opposed to the idea of merging RINL for fears of its autonomy and supply of steel to the state. “The ministry is yet to decide on a strategy to solicit a political consensus and it will do so going forward. The benefits for the merger remain strong as RINL will then gain access to captive mines and more resources apart from protection from predators,” the source maintained. About the proposed mergers of Maharashtra Electrosmelt (MEL), Nilachal Ispat Nigam (NINL) and Bharat Refractories (BRL) with SAIL, officials said the respective boards had already approved the merger and now the final nod would have to come from the cabinet before the Union. SAIL had recently amalgamated with the Indian Iron and Steel Company at the beginning of this year and is in the process of merging with the ailing West Bengal public sector unit National Iron and Steel Company.

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Stainless steel likely to rise on high input costs

Prices of stainless steel products may rise once again, soon, owing to rising costs of inputs like nickel. Arvind Parakh, director - finance, Jindal Stainless, said prices of inputs rose once again after the company had hiked prices of its stainless steel products in the last week of July, adding that the firm was closely monitoring the demand and price situation. Jindal Stainless had last raised the price of grade 304 stainless steel to the tune of Rs 2,000-3,000 a tonne (depending on specific customer requirements) to approximately Rs 70,000 a tonne in July-end. Parakh also said given the daily fluctuations in nickel prices, customers, who made enquiries, were offered a price which was valid only for the next 48 hours. On the London Metal Exchange, nickel a key raw material is currently quoting at $28,050 a tonne compared with $18,975 a tonne in mid-June. Nickel was understood to constitute about 10-15 per cent of the stainless steel production cost, depending on the grade of the product, analysts said. The rise in nickel prices is attributed to declining availability of the metal at the LME. For instance, the exchange's official opening stock for nickel on August 8 was 5,958 tonne almost one-third of the June 15 inventory level of 15,840 tonne. Meanwhile, analysts said end-user industries, such as construction, are increasingly showing signs of shifting to low-nickel stainless steel grades in a bid to offset rising costs of nickel.

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Prices of steel, iron ore not to be regulated

The government does not intend to introduce a mechanism to control the prices of steel and iron ore as they are deregulated and are governed by market forces. “The prices of iron ore as well as steel are deregulated and are governed by market forces. There is no proposal for introducing price control mechanism,” Steel Minister Ram Vilas Paswan said in a written reply to a question to Rajya Sabha. In view of sufficient reserves of iron ore was no proposal to completely ban the export of iron ore, he said in reply to a supplementary query. He pointed out that the total iron ore (haematite and magnetite) production in the country was 22,107.99 million tonnes. In reply to another query, Minister of State for Steel Akhilesh Das said SAIL has decided to enter into a strategic partnership with Jaiprakash Associates Ltd for jointly producing cement in Madhya Pradesh and Chhattisgarh and a letter of intent has been issued to them in this connection. Jaiprakash Associates would have 74 per cent equity in the joint venture while SAIL would hold the remaining 26 per cent, Das said. Das said the country has exported 1,76,1784 tonnes of steel over the last two financial years.

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This summit is expected to provide a forum for interaction between the Indian Iron Ore Producers and Chinese Steel Industry, trading companies, representatives of the Governments, industry and many others interested in the future of Iron and Steel industry and to discuss issues relating to joint collaboration, research and market trends.

China continuous to dominate the world steel scenario with an impressive 18% growth in its crude steel production in the first quarter of 2006. Its share in the world crude steel production has also increased to 33% in this quarter.Naturally, it continues to be the engine for the world iron ore industry. Imports of iron ore by China at 92.2 million tonnes in the first three months of 2006 have registered at another high growth of 28%. This is quite remarkable because this growth rate is almost similar to the 32% growth it has established in its iron ore imports in 2005 reaching a 275 million tonnes. Chinese share in world sea borne iron ore trade (670 million tonnes) is as high as 41%.

China's continued growth has prompted large global iron ore producers in Brazil and Australia to go for expansion n their production capacities by another 340 million tonnes which are expected to come on stream between 2006 and 2008. India continues to be the second largest exporter of iron ore to China with exports of 68.55 million tonnes in 2005, which is about 25% of the total iron ore imports by China and India will continue to play an important role in the China's iron ore market. But to do so in this intensively competitive market, Indian iron industry has to reach new heights in productivity and in optimizing its operations.

It is against this background that Federation of Indian Mineral Industries proposes to hold Indian Iron Ore Summit on 13-14 November, 2006 in Bangalore.

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Bhilai Steel Plant is the flagship unit of Steel Authority of India Ltd. (SAIL). It has won the Prime Minister's Trophy for the Best Integrated Steel Plant seven times. Apart from excelling in various production, productivity and techno-economic parameters, Bhilai Steel is also known for its innovative HRD initiatives.

To celebrate the glory of steel and pay homage to the multi-faceted characters of the world steel stage, Bhilai Steel Plant is organizing an innovative and inter-active development programme called the 'Steel Quiz Bonanza (SQB)'. In this event, teams from all Public Sector and Private Sector Steel Companies, teams from different of SAIL and teams from various Iron & Steel Associations are being invited. Prime Minister's Trophy for the Best Integrated Steel Plant seven times. Apart from excelling in various production, productivity and techno-economic parameters, Bhilai Steel is also known for its innovative HRD initiatives.

To celebrate the glory of steel and pay homage to the multi-faceted characters of the world steel stage, Bhilai Steel Plant is organizing an innovative and inter-active development programme called the 'Steel Quiz Bonanza (SQB)'. In this event, teams from all Public Sector and Private Sector Steel Companies, teams from different of SAIL and teams from various Iron & Steel Associations are being invited.

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Steel Authority of India (SAIL) has set another growth milestone by aiming at a capacity of 40 million tonne by 2020. The state-owned steel major has already embarked on a corporate plan of achieving 22.5 million tonne capacity by 2012. V K Srivastava, managing director of Bokaro Steel. said Bokaro would have 12 million tonne of SAIL's 20 million tonne but subject to market conditions. He also clarified that SAIL's plan beyond 2012 was only at the discussion stage and subject to demand prevailing at that point in time. At present, SAIL has a capacity of 14.5 million tonne. Srivastava was speaking on the sidelines of the Indian Refractory Makers Association (IRMA) annual general meeting. SAIL's 40 million tonne plan comprised greenfield facility of five million tonne for Bokaro steel plant. By 2012, Bokaro would have a 6.5 million tonne plant. SAIL recently announced its decision to compress its expansion plan by two years besides increasing the proposed investment, at the behest of Union steel minister, Ram Vilas Paswan. The revised plan envisaged increasing output from 14.5 million tonne to 22.5 million tonne at an investment of Rs 37,000 crore. The timeline was compressed from the original schedule of five to three years. Meanwhile, SAIL is considering to take over Bharat Refractories, a refractory maker under the ministry of steel. Srivastava said talks were on but the process of merger would take another six months to a year. Bharat Refractories was close to Bokaro Steel Plant. Post-merger SAIL could infuse funds for working capital. Srivastava said Bharat Refractories would fit into SAIL since it had good facilities and was close to Bokaro. At present, it meets around 45 per cent of Bokaro's input requirements.

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Global Steel wins competitive bid for Magnohrom; deal size estimated at around $40 million. Global Steel Holdings Limited, the holding company of the M L Mittal-controlled Ispat group, has acquired the assets of Magnohrom, refractory maker of Serbia and Montenegro, erstwhile Yugoslavia. Global Steel outbid a local company in a public bidding invited by the government to acquire Magnohrom. Sources said the Kraljevo-based Magnohrom would form an integral part of Global Steel's worldwide operation to provide quality raw material support for the group's steel business. While Global Steel did not disclose the acquisition cost, indications were that the deal size could be in the range of $30-40 million including committed investments to rehabilitate and modernise the plant over the next few years. Besides supplying crucial refractory material for steel making blast furnace, Magnohrom also has its own mining operations in magnesite and non-metal minerals. Sources said the factory employs around 2,700 workers and Global Steel would fulfil all the social obligations agreed upon the sale.

Magnohrom produces refractory material in the ferrous and non-ferrous metallurgy, cement, glass, sugar and lime industries. With the massive expansion lined up, tying up raw materials had become crucial for profitability and growth for all steel companies. Global Steel operates and manages about 14 million tonne of steel making capacity in various parts of the world, including 3.5 million tonne of Ispat Industries in India. Global Steel operates and manages steel making and processing capacities through ownership, long-term concessions or commercial contracts at Bulgaria 2.2 million tonne, Nigeria (Delta Steel and Ajaokuta Steel Company four million tonne combined), Libya 1.8 million tonne, The Philippines (three million tonne and India (3.5 million tonne).

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Jindal Steel and Power Ltd.'s plan to develop iron ore mines in Bolivia has been delayed as the Bolvian government has asked for higher royalty, reports said. "A final decision on the project will probably be taken by the end of the week," a Jindal Steel official said. In early June, Jindal Steel had announced plans to invest $2.3 billion to develop the mines and use the ore to set up a 1.7-million-ton steel plant, 6-million-ton sponge iron plant and 10-million-ton pelt making unit at El Mutun, the report said without further details. Jindal has been awarded mining rights for half of the estimated 40-billion-ton iron ore deposits at El Mutun.

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The Kalyani group is in talks with financial institutions to acquire SJK Steel Corporation, an ailing iron and steel company at Tadipatri in Andhra Pradesh. The proposed takeover is part of SJK's restructuring package being hammered out by banks and financial institutions. The company's outstanding to financial institutions stood at over Rs 1,300 crore. Sources close to the development said the Kalyani group would not be ready to invest more than what a greenfield venture of the size of the SJK plant would require. A new plant with a blast furnace which can produce 2.5 lakh tonne steel a year would require an investment of Rs 450 crore. The time required for the plant to be set up is four years. This is the second financial restructuring package for the billet (2.5 lakh tonne capacity) and pig iron making unit promoted by Jithin Kumar and associates. The first revamp package for SJK, under the corporate debt restructuring mechanism, was finalised in 2002-03, along with a bailout package extended for steel units which were saddled with high-cost loans. However, it's not known which company of the Kalyani group, whose flagship is Bharat Forge, might take over the SJK plant. “A company having strong balance sheet would acquire it, if the talks with the financial institutions fructify,” said a source in the group. Kalyani Steels, the group's steel company, might run the day-to-day operations of the plant post the acquisition. The group is in advanced stages of negotiations with lenders for taking over control, including equity holding in SJK, the sources said. The outstandings would be paid back by using revenues generated from SJK Steel. The group is expected to pick up 80 per cent equity worth about Rs 56 crore. The payment of outstanding will have two components.

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Tata Steel is planning to acquire manganese mines in South Africa and is likely to float a joint venture. P Roy, executive in charge of ferro alloys and minerals, said this on the sidelines of a seminar on Indo-Africa project partnership, organised by the Confederation of Indian Industry (CII). Besides manganese, the company was also looking for coal blocks in South Africa. “We are looking for two to three manganese blocks in South Africa apart from coal blocks. Iron ore available in that country is on the lower side and most of the mines have already been tied up,” Roy said. Tata Steel already has an agreement with AMCI Australia Pty Ltd for 5 per cent interest in Carborough Downs Coal Project in Queensland, Australia. The Carborough Downs coal project is majority owned and operated by a subsidiary of AMCI Holdings, AMCI International AG. On the ferro chrome project, he said the foundation stone laying would be held in the third week of this month. “The production in the mines will start from October next year,” he added. The effort to tie up raw material linkages is part of the company's initiative to own strategic raw materials worldwide.

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With the metal industry showing promises of propelling India on the path of economic growth, the country must aim to enhance its steel production to over 100 million tonne by 2020, Tata Steel Managing Director B Muthuraman said here on Friday.

"We are in a position to produce over 100 million tonne steel and we must do it. If China can produce nearly 300 mt of steel every year, why can't India?" Muthuramam, who took over as president of the Indian Institute of Metals, told reporters here. He said there would be roadblocks and problems, but these were common in other countries. Even China that produced about 300 mt of steel, faced it, he said, adding per capita steel consumption in India should be increased from the present level of 30 kg.

He said globally world crude steel production has reached 1132 mt in 2005 with an average annual growth rate of six per cent over the last five years.With hectic activity in all round development of infrastructure projects including roads, ports, airports, railways, housing etc, India should sustain consistent overall growth rate of about nine per cent, he said.

Muthuraman said Aluminium was the second most important metal in the developing economy and India with its vast resource of bauxite, was poised for substantial growth.Aluminium smelting capacity currently at one million tonne, would reach a level of two million tonne in next five years.

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Mittal Steel has announced sell-off plans that entitle remaining shareholders of Arcelor to sell their shares to the company within three months following the end of the current merger period. The shares can be sold from August 18 to November 17.

Under the sell-off plan, which conforms to Luxembourg law, the remaining shareholders of Arcelor may sell their shares solely for cash, at a price of €40.40 per Arcelor share (the cash consideration offered to Arcelor in the secondary cash offer), which the Luxembourg Commission de Surveillance du Secteur Financier (CSSF) has indicated was the fair price in the sell-out proceedings.

As per the provisions of the Luxembourg takeover law, the sell-out offer should be valid for three months, ie from the start of August 18 to the end of business hours on November 17, 2006. Mittal Steel will have a standing buy order at that price on each of the markets where Arcelor shares are listed, including Euronext Brussels, Euronext Paris, the Luxembourg Stock Exchange and the stock exchanges of Barcelona, Bilbao, Madrid and Valencia.
Settlement of trades will take place in accordance with the rules on each market.

If Mittal Steel holds 95 per cent or more of the capital and voting rights in Arcelor at any time prior to the three-month period, the remaining shareholders of Arcelor may sell their Arcelor shares to Mittal Steel at a price of €40.40 per Arcelor share when Mittal Steel exercises such right.

Mittal Steel is the world's largest and most globally diversified steel company. The company has operations in 27 countries, on five continents. Mittal Steel has a comprehensive portfolio of both flat and long steel products that meet a wide range of customer needs. It serves all the major steel consuming sectors, including automotive, appliance, machinery and construction.

For 2005, Mittal Steel had revenues of $28.1 billion and steel send this article to a friend shipments of 49.2 million tonnes. The company trades on the New York Stock Exchange, Euronext Amsterdam, Euronext Brussels, Euronext Paris, the Luxembourg Stock Exchange, and the stock exchanges of Barcelona, Bilbao, Madrid and Valencia.

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 Kumar Managalam Birla, the chairman of the Aditya Birla Group, has stepped down from the board of Tata Steel months after relations between the two groups soured following a spat over their stakes in Idea Cellular, the telecom company.

Apart from Tata Steel, Mr. Birla is on the board of the PM's advisory council on trade and industry. He is also present on the board of the ministry of company affairs advisory council and on the Uttar Pradesh Government's investment's task force. Apart from this, Mr. Birla is also on board of various educational institutions. Last Month, Mr.Birla resigned as non-executive independent director of Maruti Udyog.

The timing of Mr. Birla's resignation, just months after the Idea spat and its resolution, has triggered speculation over the relations between two of the country's oldest business groups. The groups had traditionally been friendly and cordial to each other. Pilani Investments, the GD Birla holding company, held 8% stake in Tata Steel for a long time.Mr. Birla was appointed on the board of Tata Steel in 1998, in what was then seen as a public expression of co-operation between the two groups.

The relations seemed to get a boost in '00, when the two groups combined their GSM-based cellular business into Birla-AT &Tata. Ironically, the same cellular company became a battleground six years later when the Tata group decided to exit the business.

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A new ‘Wavelength dispersive X Ray Fluorescene Spectrometer’ (WDXRF) was inaugurated by Mr. A. K. Bhandari, ED, Works at the Express Laboratory of SMS-1, on 22nd June. Mr. A. K. Das, GM, Services, Mr. S. K. Sinha, GM, Quality and Mr. B. B. Singh, GM, Steel, were among the dignitaries present on the occasion.

This equipment offers a state-of-the-art technology designed for elemental determination of ferrous and non-ferrous materials. It can analyse metal both ferrous and non-ferrous and powder samples like slags, fluxes, ferrolloys and refractory materials etc. This equipment has many technologically innovative features in the area of optics, detection and counting systems compared to earlier model. Combining the state of the art 4 Kw X-ray excitation, focusing optics, the compact and focusing gearless geniometer and fourth generation counting electronics, this machine offers very accurate and faster analysis. Besides, the latest version of the user friendly Super Q software makes more accurate quantitative and qualitative analysis easier than before. After installation of this equipment, the samples which used to earlier take 3-4 days for analysis can now be analyzed instantly with much ease and accuracy and with minimum involvement of manpower. One of the unique features of this system is that the system is directly attached to a modem. As a result in case of any problem in the system it can be accessed through the internet and the problem can be diagnosed from anywhere in the world.

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Construction industry calls for a rise in steel consumption

The GCC construction industry, an integral part of the global construction industry, is witnessing a boom since the year 2002, primarily due to high oil prices, renewed liquidity and strong investor confidence. With oil prices fixed firmly above US$60 a barrel and over US$ 1 trillion worth of projects planned or under way in the GCC, the stage is set for the activities to continue uphill for the next five years and beyond. In 2005, the region's market went from strength to strength and reached new heights in terms of contracts awarded and projects announced. The outlook for 2006 looks equally buoyant across most sectors including infrastructure, building, power and water and petrochemicals. The total value of contracts awarded in the region has more than doubled in the past two years. The activity at Kuwait's construction industry is in line with the general Gulf trend. The state of Kuwait is going through a complete head to toe overhaul. The local real estate companies, in the wake of the renewed confidence in the market has already announced a handful of prestigious projects including the $5,500 million Khabary City project, planned by Efad Holding subsidiary Al-Dar First Holding, and the highly ambitious Madinat Hareer (City of Silk) in Subiya, estimated to cost more than $86,000 million.

If completed, this project would include one of the world's tallest tower, and numerous housing, health, education, environmental, business, and touristic centers. A host of smaller projects will also come on stream, including individual tower projects and various housing schemes. Kuwait is planning to invest nearly $64,000 million in its hydrocarbon sector over the next 15 years as it seeks to ramp up both oil production and refining capacity. The lion's share, $26,000 million, will be invested upstream domestically as the country aims to attain the goal of 4 million barrels a day (b/d) of crude production capacity by 2020, while $17,000 million will be invested downstream. As for the remainder, $8,000 million will be spent in the local petrochemical industry, $7,000 million on international downstream schemes, including a planned integrated refinery and petrochemical complex in southern China, $4,000 million on upstream opportunities overseas through Kuwait Foreign Petroleum Company (Kufpec), and $2,000 million on acquiring new crude carriers.

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Local contractors to bid for new intl. tennis stadium

At least four local contractors have been invited to bid by 4 September for a major contract to build a new international tennis complex in South Surra for Kuwait Commercial Market Complex Company (KCMCC). The complex will comprise three main elements covering a plot area of more than 52,000 square metres. The scope of works involves the construction of car parking, indoor and outdoor tennis stadiums, with capacity for more than 6,000 spectators, a 120-bed hotel, a health club and players' facilities. Invited companies include Ahmadiah Contracting & Trading Company, Alghanim International General Trading & Contracting Company, Consolidated Contractors Company (Conco) and Mushrif Trading & Contracting. The local Pan Arab Consulting Engineers (PACE) is the design consultant. Kuwait United Construction Management (KUCM) is the project manager.

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Zubair Corpn and L&T plan fabrication yard

Muscat-based The Zubair Corporation has formed a joint venture with India's Larsen & Toubro (L&T) to establish a fabrication yard at Sohar industrial port. L&T will have a 65 per cent stake in the firm with Zubair holding the remainder. L&T Modular Fabrication Yard company will manufacture offshore steel structures, such as platforms, jackets and topsides. The assembly yard expects to receive orders from GCC, African and Indian companies. An award is imminent for the main construction contract for the yard, which will cover an area of 370,000 square metres. The scope of works includes building machine and pipe workshops and an administration block. Work is due to start in September and will take a year to complete. A consortium of Interbeton and Van Oord Gulf, both of the Netherlands, with Belgium's Six Construct will build the yard's 300-metre quay wall as part of the third phase of Sohar industrial port's development.

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ADCO invites bids to build Jebel Dhanna tanks

Abu Dhabi Company for Onshore Oil Operations (Adco) has invited three companies to submit commercial bids by 9 September for the contract to build new crude oil storage tanks in Jebel Dhanna. The invitees are Turkey's Tekfen, the local National Petroleum Construction Company (NPCC) and the UK's Whessoe Oil & Gas. The scope of works for the estimated $150 million engineering, procurement and construction (EPC) contract includes a 200,000-cubic-metre (cm) capacity tanks. Bids were originally due to be submitted in early May for the contract. However, as part of its plans for major changes in the scope of the works, Adco informed the prospective bidders of a 120-day delay in submissions. Austria's ILF Consulting Engineers has carried out the original front-end engineering and design (FEED) package; Engineers India (EIL) is the project manager.

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Minerals Tech to purchase ASMAS

Minerals Technologies Inc. announced that its wholly owned subsidiary, Minteq International Inc. has signed an agreement, subject to successful completion of due diligence, to acquire ASMAS, an Istanbul-based Turkish producer of refractories. The terms of the agreement were not disclosed. Both Minteq International and ASMAS are producers of monolithic refractories, which are used primarily by the steel industry to protect the interior of steel-making vessels and molten metal handling equipment from extremely high temperatures. ASMAS reported net sales of $20 million in 2005.

The refractories segment of Minerals Technologies Inc. reported sales in 2005 of $328 million. Paul Saueracker, chairman, president and CEO of Minerals Technologies, said, "We expect the transaction will be completed in the fourth quarter of 2006 and that the acquisition will be accretive to earnings per share in 2007.”

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Punj Lloyd bags Yemen LNG construction contract

Construction major, Punj Lloyd Ltd, has secured its first contract in the Republic of Yemen from Yemgas, the joint venture formed by Technip France, JGC Corporation, Japan and Kellogg - Brown & Root Inc., UK. Valued at US$ 69.2 million, the contract involves construction of civil, mechanical, piping, electrical & instrument, insulation and painting work for off sites and utilities of the prestigious Yemen LNG project. The project would be completed in 28 months.

The project is being executed for Yemen LNG Company Ltd., the company formed by TOTAL, Yemen Gas Company, Hunt Oil, Exxon, Sunkyong and Hyundai. It is developing a LNG Liquefaction and 6.8 MMTPA Export Terminal at Belhaf in Yemen . With this, the order backlog for PLL group is Rs 9738 crore. This is the total value of unexecuted orders as of August 01, 2006 and new orders received till date. Commenting on the winning the contract, Mr Atul Punj, Chairman, Punj Lloyd, said, “construction of cryogenic facilities is the core competence of Punj Lloyd and select few in the world undertake such specialized works. This is an important milestone for Punj Lloyd. We have been looking at expanding our geographies and this order, will help us further strengthen our foothold in Middle East .”

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Qasco expansion costs $1.9 billion till June

Qatar Industries Company, which is the mother company of Qatar Iron and Steel Company (Qasco) has announced in its bi-annual report that the total cost of the expansion projects of Qasco has amounted until the end of the first half of 2006 approximately 6.9 billion Qatari Riyals (1.9 billion US dollars) and that the shares value owned by Qatar Industries Company in it amounts to 6.7 billion Qatari Riyals (1.84 US dollars).

The report referred to the expansions performed by the company and the stages of completing them. It states that the first stage will expire by the end of 2006, and the second stage by 2010. The report of the Secretary General of the Arab Iron and Steel Union, submitted to the meetings of the Board of Directors and General Assembly of the Union, has foreseen the expansion projects performed by Qatar Iron and Steel Union covering increasing the production capacity of rolled bars by 700 thousand tons per year, setting up a mill to produce 1.5 million tons of DRI (Direct Reduction Iron) and HBL (Hot-Briquetted Iron)and a meltshop and continuous casting mill with a production capacity of 600 thousand tons. In addition, there is the joint project between Qasco and Indian Essar Company regarding setting up an integrated mill to produce steel and flats with a production capacity of 1.5 million tons per year.

The first stage includes setting up a mill to produce hot-briquetted iron and a mill to produce steel flat products in the second stage. Qasco has already gained a strategic position by owning a share of the shares of the Australian Sphere Investments Ltd. Through its project in Guelb Al Ouje in Mauritania, as it has bought over 9% as a strategic share in the Australian company for an amount of 13.15 million Australian dollars. This deal will enable Qasco to own 9.13 million regular shares the price of the share of which is Australian Dollar 1.15. This deal will contribute to strengthening of the company's supplies and securing its requirements of the iron ore, in addition to its contribution to the development of the Mauritanian iron and steel industry.

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Shanghai bourse's plan to launch steel futures hits snag

The Shanghai Futures Exchange's plan to launch domestic steel futures this year has run into a snag, as objections by the China Iron and Steel Association have apparently persuaded the country's top regulators to put the idea on the backburner. "The launch of steel futures is believed to be shelved for now," said an official at the Shanghai Futures Exchange Monday. "And our previous plan to launch it by the year-end doesn't seem to be very likely now." Although the China Securities Regulatory Commission has given the green light to the trading of steel futures on the exchange - where copper, aluminum, natural rubber and fuel oil futures are already traded - the plan apparently hasn't won the support of the National Development and Reform Commission, the country's top economic planning agency.

The launching of any commodities futures product needs the initial approval of the CSRC, then that of the NDRC and State Council, or Cabinet, both of which seldom go against CSRC's decision. Yang Maijun, director of the CSRC department overlooking the futures market, said in mid-June that the time was ripe to trade steel futures, but analysts now interpret the comment as CSRC's response to CISA's objections. "We believe the risks brought about by futures trading will be bigger than its benefits," Qi Xiangdong, vice general secretary of CISA. A small fluctuation in futures prices will probably have an amplified effect on the domestic spot market, and have an impact on all steel products across the board, even if it is just steel rebar and wire rods. The Shanghai Futures Exchange has elected rebar and steel wire rods to be traded on the futures market initially, as they are highly standardized and their prices volatile. Moreover, "given the irregularities in futures trading, I don't think the market is ready for it," Qi said.

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Posco studying plan for steel plant in Vietnam

Posco, the world's fourth-largest steel maker by output, said that it was considering the possibility of building a steel plant in Vietnam. "Vietnam is one of the many sites we are looking at as we seek various investment opportunities. We're currently studying the plan, but nothing has been decided yet," a Posco spokesperson said. The company was responding to a report by local TV station KBS, citing the Vietnam Steel Association, which said that Posco had submitted a proposal to the Vietnamese government and selected Ba Ria-Vung Tau Province as the construction site. According to the report, Posco would build the $1 billion-dollar plant in two phases for hot-rolled and cold-rolled products by 2012. When completed, the mill would be expected to produce three million tons of steel products annually.

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Australia's ACCC has concerns over Smorgon, OneSteel

The Australian Competition and Consumer Commission has identified "potentially significant competition concerns" with the proposed merger of OneSteel Ltd. and Smorgon Steel Ltd. ACCC Chairman Graeme Samuel said the deal would bring together the two major producers of long steel products. "While imported steel products, both as final products and as feedstock for local processing and fabrication, will limit the competitive impact of the acquisition for some types of long steel product, the ACCC is concerned that imports will not act as an appropriate competitive constraint across the range of all long products," he said.

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Angang New Steel plans CNY22.6B iron, steel projects

Angang New Steel Co., China's second-largest steel maker by output, said it plans to build an iron and steel production facility in northeastern China for CNY22.6 billion ($2.8 billion) to boost its capacity. The company said the new facility may need about 7.3 million tons a year of iron ore as raw material. The majority of the iron ore could be imported from countries such as Australia, India and Brazil, it said. The steel maker said the facility, to be located in Bayuquan Port in Liaoning province, will have an annual capacity of 4.9 million metric tons of iron and 5 million tons of crude steel. Angang said the plan has been approved by National Development and Reform Commission, the mainland's economic planning agency.

The facility will also produce 4.9 million tons of steel products which include 2 million tons of heavy plate, 1.9 million tons of hot-rolled sheets and 960,000 tons of cold-rolled sheets. Heavy plates are mainly used for shipbuilding and heavy machinery, while hot- and cold-rolled sheets are used in the automobile, household appliance and construction industries. "A major part of the investment focuses on heavy plates steel products, which are used in shipbuilding. That suggests Angang is eyeing to tap China's robust shipping industry growth," Geoffrey Cheng, analyst at Daiwa Institute of Research said.

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Vietnam ministry okays Tycoons Group's $1bn steel plant

Vietnam's Ministry of Planning & Investment, or MPI, has approved an investment project valued at $1 billion from Thailand's Tycoons Worldwide Steel, or TWS, to build a steel plant in central Vietnam, a ministry official said. Tycoons Worldwide Steel is a Thailand-based unit of Tycoons Worldwide Group (Thailand) PCL. "After studying TWS's proposal which is very big, the MPI has given its approval.

It now requires official approval from Prime Minister Nguyen Tan Dung before an investment license can be issued," the official said. "TWS is expected to produce steel products, such as steel plates and ingots, which are in demand in Vietnam," he said, noting that development of many of the country's key industries, such as shipbuilding and construction, are depend on a reliable supply of plate products. TWS plans to start constructing its plant at the end of 2006, with production expected to begin in 2009. State media said TWS plans to build a steel plant with an initial annual production capacity of two million tons in Dung Quat industrial park, in Quang Ngai province, about 800 kilometers south of Hanoi. Production is expected to rise to five million tons a year after 2010. If licensed, TWS's plant will become the largest of its type in Vietnam, as domestic steel plants currently have a capacity of less than 500,000 tons a year.

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Russia's Novolipetsk Buys VIZ-Steel For $550 mn

Russia's major steel producer Novolipetsk Steel announced that it had acquired 100% in the Ekaterinburg-based electrotechnical steel producer VIZ-Steel for $550 million, reports said. Novolipetsk paid the full amount out of its own funds to VIZ-Steel's former owner Duferco. VIZ-Steel produces 200,000 metric tons of cold-rolled electrotechnical steel a year, accounting for 56% of the Russian domestic market and 11% of the world market. The acquisition enables Novolipetsk to become one of the three largest producers of electrotechnical steel in the world.

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Steelworkers oppose wheeling-Pitt/CSN tie-up

The United Steelworkers will oppose the proposed merger of Wheeling-Pittsburgh Corp. (WPSC) with the North American operations of Brazilian steelmaker Companhia Siderurgica Nacional (SID). USW District 1 director David McCall sent a letter to Wheeling-Pitt management Monday saying Wheeling-Pitt's decision to accept an offer from the Brazilian company, known widely as CSN, violated terms of the union's contract.

The union has thrown its support behind a hostile offer from privately-held steel service center operator Esmark Inc. to merge with Wheeling-Pitt. Wheeling-Pitt representatives weren't immediately available for comment recently. When it announced the deal with CSN earlier this month Wheeling-Pitt said it would file documentation on the deal upon expiration of a "right to bid" provision of the union's contract - which allows the union to designate a competing bidder for the company. However, Wheeling-Pitt didn't say when that period would expire. Wheeling-Pitt "breached our contract when it accepted CSN's offer," USW's McCall said.

The USW claims the contract doesn't allow Wheeling-Pitt to enter into a strategic transaction like the one with CSN before Feb. 5, 2007. Under Wheeling-Pitt's deal with CSN, the Brazilian company would get a 49.5% stake in the merged company in exchange for: contributing its 900,000-ton steel-processing facility in Terre Haute, Ind.; $225 million in financing potentially convertible into 11.8 million shares of the new company; exclusive distribution rights for CSN's flat-rolled steel in the U.S. and Canada; and a 10-year contract to provide steel slabs.

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China's crude steel output rose 22.2% on year to 36.09 million metric tons in July, the National Bureau of Statistics said. Total crude steel production from January to July reached 236.04 million tons, up 18.9% on year. Meanwhile, pig iron production rose 22.9% on year to 34.71 million tons in July. January to July output totaled 228.05 million tons, up 21.1% on year. Statistics provided by the Bureau also indicates that iron ore output in July rose 33.7% on year to 50.25 million tons, and total production from January to July rose 35.3% on year to 295.97 million tons.

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